How DeHaat is strengthening Bharat’s roots with technology
A scale model of a rustic farm shop, perched atop a storage unit, catches my eye inside this tiny office. The workspace features open plan offices, prominent company branding, and motivational posters, and the template appears to be built to scale, showing the detailed layout and branding of the store.
I’m inside the Gurugram headquarters of agritech startup DeHaat, in a nondescript commercial office building, where it occupies several other small offices as well. The 10-year-old company blends technology with physical infrastructure, such as warehouses and franchise stores, to deliver application-based agricultural solutions to farmers and other relevant stakeholders. With expected monthly revenue of R230-250 crores in this financial year and is one of the oldest and largest in the sector. Its occupancy in commercial real estate refers to the way startups tend to expand — one small office at a time, until they’re big enough (and funded enough) to consolidate into a large workspace. DeHaat also moved to a larger space in Gurugram a few weeks after my visit. It also has headquarters in Patna.
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Scale model of a farm shop in the countryside
Agritech entrepreneurs in India have attracted significant funding and media attention in recent times, with many of them offering a range of emerging business models.
Build the right model
The miniature model adds flavor to the look and feel of the office. It represents the typical DeHaat center, or franchise store, run by company-appointed micro-entrepreneurs who serve farmers in the vicinity.
There are 10,000 such centers in 11 states, mostly in western, eastern and northern India. Having the model in the office “reminds us of who we are and what we do, and keeps us rooted,” says Shashank Kumar, 37, co-founder and CEO of DeHaat.
“DeHaat is a full stack model. “We have tried to put everything related to agriculture under one roof for the Indian farmers,” Kumar explains. “This means helping Indian farmers through every stage of the planting cycle, from soil testing to sowing, giving them better access to high-quality agricultural inputs, such as seeds, fertilizers and pesticides, and advising them in a tailored way, so that they can reduce The cost of its cultivation, it can improve fertilizer dosage, protect soil fertility or the groundwater table. We also provide financial and insurance services, and then at the end of the season, we provide post-harvest services in terms of logistics or market link.”
Kumar is one of the earliest examples of a highly educated businessman who returned to his agricultural roots.
After spending his early years in rural Bihar, where his family initially relied on 3.2 acres of land for farming, he graduated from the Indian Institute of Technology (IIT)-Delhi and worked with a consulting firm before deciding to start DeHaat in 2012.
DeHaat’s team of four co-founders consists of well-qualified graduates from IITs and IIMs (Indian Institutes of Management) – a breed of entrepreneurs who are comfortable working at grassroots level with Indian farms as they collaborate with global networks. Silicon Valley type venture capitalists.
There may be a romantic allure to this entrepreneurial trope of leaving corporate jobs to rural entrepreneurship, and yet I think it needs specific characteristics to succeed.
recipe for success
First, the footwear approach to the floor. As the microcosm suggests, Kumar realizes the importance of grounding, by building a significant local physical presence, and a deep understanding of the needs of the Indian farmer, the agricultural sector, its limits and economic potential.
According to Kumar, farmers save a lot of costs due to “better price discovery and getting rid of middlemen,” and weekly crop advisory alerts lead to better returns.
The market link with institutional buyers on DeHaat platforms allegedly provides better prices.
Empathy is vital, too. Convincing farmers to adopt technology is a journey that requires understanding their needs and demands.
Kumar says DeHaat is trying to convince farmers that they are long-term allies, not seasonal intermediaries.
It’s not like we provide everything they need, but whatever we do, it’s professional and transparent. Technology brings hope for the future, and is connected to the latest farming technology in the larger world. “It brings excitement,” he says.
Second, ambition. As motivational posters on the walls highlight, DeHaat wants to expand. “We work with approximately 1.3 million farmers. There are more than 100 million farmers in India. Looking at the kind of response we get from farmers when we replicate this model from one location to another, it gives me a lot of confidence. We are talking about working with 20- 25 million farmers in India in the next four and a half years.
Although the company has grown 50 times in the past three years, she is an ambitious figure.
Finally, and perhaps inappropriately – patience. Kumar and his co-founders spent years working on the business model before going on to raise funds from outside investors. They have raised over $150 million since March 2019.
“Shashank only raised money when he knew what to do with it (the money),” says Mark Kahn, managing partner and co-founder of Omnivore, a DeHaat investor.
Kumar says, “If you see our flight, for the first seven years, we didn’t hit a range at all, and our scale was less than optimal.” He adds, “First, we built experience for every job. And then we digitized everything, and we built a digital directory. That’s why you’ve grown 50-fold in the last 30 months. We don’t need to spend another four or five years, in any new geographies.” We have all the right products and services that farmers need, which is why the gestation period for us in any new geographic area will be very short. If you can build the right model, if you can build an enterprise, growth is not a question at all.”
It’s not an easy trio of skills, but to succeed in Bharat, in my opinion, that’s what it takes. Just as crops take time to grow, business models and entrepreneurs also take time to mature and prove themselves.
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Aparna Piramal Raje meets with heads of organizations each month to investigate the links between workspace design and work styles.